84

News

Danish business organisation DI: Top tax rate costing country billions

TheCopenhagenPost
September 28th, 2015


This article is more than 9 years old.

Abolishing the additional tax on high earners would increase the supply of labour and GDP, according to study

The business interest organisation Dansk Industri (DI) has elaborated how much better off Denmark would be if the top tax rate were lowered or abolished, Berlingske Business reports.

READ MORE: Dansk Industri proposing to remove top tax bracket and increase pension age faster

Would boost GDP
The study found that doing away with the additional top tax rate of 15 percent would increase the supply of labour by the equivalent of 16,000 people working full-time and boost the gross domestic product (GDP) by 15 billion kroner.

This projection is on the basis that abolishing the top tax rate would encourage top tax payers to work an average of 1.7 percent more, more people to go after high-paying jobs and fewer highly-educated people to leave the country.

The tax revenue from the top tax is 15.4 billion kroner this year and is expected to fall to 13.8 billion kroner next year as a result of the threshold being raised gradually as part of a 2012 tax reform.

This lost revenue, the study claims, would be offset by as much as 7.3 billion kroner in sales taxes from a rise in consumption associated with people being better off and more income tax at the lower rate as a result of the increased supply of labour.


Share

Most popular

Subscribe to our newsletter

Sign up to receive The Daily Post

















Latest Podcast

A survey carried out by Megafon for TV2 has found that 71 percent of parents have handed over children to daycare in spite of them being sick.

Moreover, 21 percent of those surveyed admitted to medicating their kids with paracetamol, such as Panodil, before sending them to school.

The FOLA parents’ organisation is shocked by the findings.

“I think it is absolutely crazy. It simply cannot be that a child goes to school sick and plays with lots of other children. Then we are faced with the fact that they will infect the whole institution,” said FOLA chair Signe Nielsen.

Pill pushers
At the Børnehuset daycare institution in Silkeborg a meeting was called where parents were implored not to bring their sick children to school.

At Børnehuset there are fears that parents prefer to pack their kids off with a pill without informing teachers.

“We occasionally have children who that they have had a pill for breakfast,” said headteacher Susanne Bødker. “You might think that it is a Panodil more than a vitamin pill, if it is a child who has just been sick, for example.”

Parents sick and tired
Parents, when confronted, often cite pressure at work as a reason for not being able to stay at home with their children.

Many declare that they simply cannot take another day off, as they are afraid of being fired.

Allan Randrup Thomsen, a professor of virology at KU, has heavily criticised the parents’ actions, describing the current situation as a “vicious circle”.

“It promotes the spread of viruses, and it adds momentum to a cycle where parents are pressured by high levels of sick-leave. If they then choose to send the children to daycare while they are still recovering, they keep the epidemic going in daycares, and this in turn puts a greater burden on the parents.”